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California Construction Loan Stats
According to private lending data provider, Analytics Logics, the average interest rate for fix & flip loans in California is 10.99%. The average loan amount is $1,517,312. These stats are the average of all the loans which were funded between April 1, 2023 and September 15, 2023 by the many private lenders who use Liquid Logics’ loan origination software to manage their lending operations.
Private construction loans are typically for the vertical costs of building residential properties which will be sold or rented upon completion. Some lenders will participate in the land acquisition, but the majority only provide financing once the project is shovel-ready with building permits in hand.
Funded Residential Construction Loans in Los Angeles County
Ground-Up Construction Loan for SFR in Los Angeles, California
Center Street Lending, a direct private hard money lender for residential real estate investors, funded a $3,117,200 1st lien position ground-up construction loan for a luxury single-family home in Beverly Hills, California. The land was owned free-and-clear with an estimated value of $6,500,000. We funded 57% of the $5,466,000 construction budget, while the Borrower contributed 43%. The completed value was estimated at $10,500,000 so our loan-to-completed value was 57%. The Borrower is a highly experienced builder who had already completed most of the horizontal development. The subject property will be a 6,259-square-foot Ridge View architectural home with breathtaking views of West LA and the Pacific Ocean. The Borrower plans to sell the property upon completion of the vertical construction. The interest rate was 11.49% and we charged 1.5% origination points. The loan term was set at 18 months. This SFR ground-up construction loan was funded in May 2023.
Private Construction Completion Loan for Spec Home in Malibu, California
SDC Capital, a direct private lender based in Burbank, funded a $1,000,000 (50% As-Is LTV) 1st lien position loan to complete the construction of a 5,000-square-foot single-family residence in Malibu, California. The Borrower, a real estate developer, purchased the land in 2018 with cash and was already well into framing when the deal landed on our desk. We were confronted with the usual mid-construction obstacle of obtaining mechanic’s lien coverage. Fortunately, we’ve had more and more success in obtaining this coverage recently, so we were able to put this deal together quickly. Of the $1,000,000 provided, $500,000 was advanced at closing while the remainder was held in fund control. This allowed the Borrower to keep moving forward with construction and gave us added protection in case the project stalled out. This loan was funded in November 2018.